The Pax2 gene is an essential regulator of early renal development and has also been implicated in a variety of human diseases both congenital and acquired. During embryonic development, Pax2 is required for the initiation and maintenance of the conversion of the renal mesenchyme to epithelium. Its presence is also required to activate GDNF and thus ureteric bud outgrowth. Pax2 expression is turned off as the glomerular, proximal, and distal tubular epithelium matures. Loss of Pax2 expression leads to an absence of kidneys in the mouse knockout, while partial loss (heterozygosity) leads to the RenaI-Coloboma syndrome in humans. Persistent expression of Pax2 is found in human and mouse PKD, dysplastic and cystic disease and also is associated with renal cell carcinoma and the Wilms Tumor. Although Pax2 is presumed to be a DNA binding transcription factor, the biochemical mechanisms of Pax2 function remain obscure. In order to understand how Pax2 expression directs early epithelial differentiation and proliferation, it is essential to identify the genes activated or repressed by the Pax2 protein. This proposal aims to identify gene targets of Pax2 using a differential screening method in cell culture. We have derived cell lines from embryonic kidney mesenchyme that exhibit altered gene expression patterns when transformed with Pax2 expressing retroviruses. Genes activated in response to Pax2 were identified using a combination differential subtraction and suppressive PCR strategy. One clone has been confirmed as a kidney specific target of Pax2 and several others will be confirmed by a variety of methods. Candidate target clones in our differential screen will be assayed for kidney specific expression during development by whole mount and conventional in situ hybridization. Direct binding of Pax2 to genomic loci will be assayed and the ability of Pax2 to transactivate transcription of reporter genes, using upstream regulatory elements from candidate targets, will be determined. The effect of Pax2 phophorylation status on target gene activation will also be examined utilizing Pax2 proteins mutated in presumed phosphorylation sites in the transactivation region. How Pax2 can alter or remodel the chromatin structure of candidate target loci will begin to be addressed. Initial experiments will focus on the DNAsel sensitivity of candidate target genes and the methylation state, two structural features known to potentiate gene expression. Further experiments will focus on target gene association with nuclear matrix, which also is known to provide a change from random to specific anchorage points when chromatin becomes active. This proposal will provide critical new data for understanding the early events underlying renal epithelial differentiation and growth. As such, it may provide novel insight into the mechanisms controlling the normal differentiation and proliferation of epithelium as well as those involved in both congenital and acquired human disease processes.